Will governmental plans to end compensation culture backfire?

Personal injury solicitor experts have recently predicted that governmental plans to curtail the so-called ‘compensation culture’ in the UK will actually backfire, leading to an increase in the amount of ‘spurious’ personal injury claims being pursued by individuals.

The new claim could cause the case to overhaul the legal aid system in the UK, which government ministers say is a necessity in order to save £400 million in public funds every year, to become derailed, industry experts say, despite the long overdue nature of personal injury compensation reform.  Ken Clarke, justice secretary, has remarked that these measures are necessary ones, due to the unnecessary litigation, slow court processes, and spiraling legal costs that have been plaguing the civil justice system.

Despite the justice secretary’s words, an umbrella organisation comprised of insurers, law firms, and charities called the Consumer Justice Alliance has issued the warning that the proposals, as they exist in the new bill working its way through Parliament will only result in making matters much worse.  Legal costs are borne by the losing party under the current system, which works because claimants will typically take out ‘after the event’ insurance cover which will pay the costs of a defendant in the event of a failure, but defendants will have no choice but to bear the brunt of their own legal costs no matter the outcome under the new scheme.

Another sore point in the proposals for the new  system is that the claimant will not need to have a lawyer in order to make a claim.  Additionally, claimants will no longer need to take out ATE insurance cover.

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